In this chapter we provide an integrated theoretical and empirical critique of the WorkChoices package, which is informed by economic principles. In section 2 we outline the emergence of the new consensus macroeconomics paradigm, which has shaped economic debate and policy development over the last two decades, yet has failed to deliver sufficient economic growth to sustain full employment in developed countries. In the following section we reflect on the tension between long-established industrial relations practices in Australia and this broad neoliberal reform agenda. We argue taht the subsumption of the labour market within the market reform process not only represents a fundamental misunderstanding of how labour markets operate, but, more broadly, is not grounded in rigorous macroeconomic principles.